The ResMed Inc (ASX: RMD) share price is having a tough session on Thursday.
In morning trade, the sleep treatment company's shares are down 5% to $27.45.
Why is the ResMed share price sinking?
Investors have been hitting the sell button this morning after concerns over those pesky weight loss wonder drugs returned.
For some time it has been well understood that weight loss drugs like Ozempic could help sufferers of obstructive sleep apnoea (OSA). This has largely been both theoretical and anecdotal.
However, this has now been proven through a clinical trial undertaken by pharmaceutical giant Eli Lilly And Co (NYSE: LLY), which has spooked investors.
What was announced?
Overnight, Eli Lilly and Co announced positive topline results of the SURMOUNT-OSA phase 3 clinical trials.
Its results showed that a tirzepatide injection (10 mg or 15 mg) significantly reduced the apnea-hypopnea index (AHI) compared to placebo, achieving its primary endpoints.
Tirzepatide is the only approved glucose-dependent insulinotropic polypeptide (GIP) and glucagon-like peptide-1 (GLP-1) treatment for chronic weight management, commercialised as Zepbound in the U.S. and Mounjaro in some global markets.
The release also notes that percentage change in AHI was a key secondary endpoint in both studies. AHI records the number of times a person's breathing shows a restricted or complete block of airflow per hour of sleep and is used to evaluate the severity of obstructive sleep apnea (OSA) and the effectiveness of treatment outcomes.
Two studies
It is worth highlighting that the trial comprised two studies. One with positive airway pressure (PAP) therapy and one without.
At 52 weeks for study one, which was without PAP therapy, tirzepatide led to a mean AHI reduction from baseline of 27.4 events per hour compared to a mean AHI reduction from baseline of 4.8 events per hour for placebo.
In key secondary outcomes, tirzepatide led to a mean AHI reduction from baseline of 55% compared to 5% from baseline for placebo. Tirzepatide also led to a mean body weight reduction of 18.1% from baseline, compared to 1.3% from baseline for placebo.
At 52 weeks for study two, with PAP therapy, tirzepatide led to a mean AHI reduction from baseline of 30.4 events per hour compared to a mean AHI reduction from baseline of 6.0 events per hour for placebo.
In respect to key secondary outcomes, tirzepatide led to a mean AHI reduction from baseline of 62.8% compared to 6.4% from baseline for placebo. Tirzepatide also led to a mean body weight reduction of 20.1% from baseline, compared to 2.3% from baseline for placebo.
Overall, while the results without PAP therapy were impressive, stronger results were achieved alongside PAP therapy.
Eli Lilly's senior vice president of product development, Jeff Emmick, MD, Ph.D, said:
OSA impacts 80 million adults in the U.S., with more than 20 million living with moderate-to-severe OSA. However, 85% of OSA cases go undiagnosed and therefore untreated.
Addressing this unmet need head-on is critical, and while there are pharmaceutical treatments for the excessive sleepiness associated with OSA, tirzepatide has the potential to be the first pharmaceutical treatment for the underlying disease.
Should you panic?
Analysts at Wilsons don't believe investors should panic over the results.
In fact, last month the broker suggested that there would only be limited implications for ResMed if Eli Lilly announced positive results from its trial.
As a result, it recently reaffirmed its overweight rating with a price target of $32.90.
